Although both variable and fixed rate loans in Australia remain low, it’s imperative that home loan borrowers are not costing themselves more money with the following home loan mistakes:
Paying a higher interest rate
According Canstar, there is a 2.26 per cent difference between the lowest and highest standard variable interest rate on home loans, meaning there could be savings to be made if your rate is currently above the market average.
Making monthly payments
By adjusting repayments from monthly to weekly or fortnightly, borrowers are able to make an extra payment each year. For example if a borrower has a $300,000 – 30-year loan, paying fortnightly instead of monthly will help them pay off their loan 4.5 years earlier, hence saving more than $20,000 in interest costs.
Not reviewing one’s home loan
It is critical that borrowers review their home loans at least every year to ensure they keep abreast of the fees and charges they are paying in the pursuit of making further savings, while mortgage brokers are able to evaluate whether or not the loan is still competitive.
With interest rates at their lowest for more than 50 years, there are some great rates available and at ChapterTwo, we can help you find them. Reach out to one of our experienced brokers today.